Perplexity AI, a rising star in the field of artificial intelligence, is reportedly in discussions to secure additional funding at a valuation significantly higher than its previous round.

The Rising Underdog: Perplexity AI, a Silicon Valley standout, is currently raising new funds to push forward in its battle against industry behemoths like ChatGPT’s parent OpenAI and Alphabet Inc.’s Google.

As reported by Business Insider, the new valuation cap far exceeds the $520 million secured by Perplexity in January. In the earlier round, the company raised $74 million in funding led by Institutional Venture Partners.

Perplexity’s latest funding round is anticipated to be structured as convertible securities, such as simple agreements for future equity (SAFE) notes, allowing venture capitalists to acquire shares at a set price in the future in exchange for immediate funding.

Although discussions are ongoing, finalization of the deal remains pending, with figures subject to alteration. Perplexity is yet to respond to Benzinga’s request for comments.

The Impact: Established in 2022, Perplexity AI swiftly gained ground in the AI-powered consumer apps sector. With backing from heavyweights like Jeff Bezos, the company has received acclaim for efficacy from industry stalwarts such as Paytm founder Vijay Shekhar Sharma.

CEO Aravind Srinivas’ confidence in Perplexity’s capacity to tackle giants like Google and OpenAI is apparent, highlighting Google’s reliance on ad revenue as a potential drawback in deploying AI-centric search engines.

Furthermore, Nvidia CEO Jensen Huang’s endorsement of Perplexity AI for research purposes underscores the tool’s rising prominence in the AI landscape.